BREAKING: Oil inventory report still shows a decline. WTI crude oil at its lowest since the end of February

• Crude Oil Inventories: Decrease by 3.775 million barrels. This result is slightly better than the assumed 4 million barrels, but better than the previous week, when inventories fell by almost 6.1 million barrels. Total inventory stands currently at 408.359 million barrels (a decline of 0.92%).

• Gasoline Inventories: Decrease by 2.33 million barrels (a decline of 1.08%). A decline of 0.9 million barrels was expected, and previously we had an increase of 2.06 million barrels.

• Distillate Inventories: Increase by 2.48 million barrels (an increase of 2.34%). A decline of 0.8 million barrels was expected, with a previous increase of 3.06 million barrels.

• Cushing Hub Inventories: Increase by 709 thousand barrels (to the level of 19.666 million barrels). This mitigates recent concerns that inventories at the hub would fall to a critical level.

• Refinery Utilization: Increase of 0.50% week-over-week.

• US Crude Imports: Decrease by 291 thousand barrels per day (bpd) to the level of 5.279 million bpd.

Commentary on the data

Today's EIA report has a rather positive impact on prices, however, we are currently still observing declines in the oil market, due to continued positive sentiment regarding the opening of the Strait of Hormuz. What is worth noting in the report?

1. Strong demand and pressure on crude oil inventory decline: A key point of the report is the continued decline in crude oil inventories (-3.775 million barrels). This decline was stimulated by two factors: an increase in activity of US refineries (an increase in utilization of 0.50%) and a lower inflow of raw material from abroad (imports fell by almost 300 thousand barrels per day). The main burden of the declines was taken by the Gulf Coast region, which is the heart of the American refining industry.
2. Fuel market (Gasoline vs. Distillates): A very positive signal for consumer demand is the solid decline in gasoline inventories (by 2.33 million barrels), which suggests a strong travel season. On the other hand, market optimism is being hampered by an unexpectedly large increase in distillate inventories (diesel, heating oil) by nearly 2.5 million barrels, which may indicate a slight slowdown in the industrial or heavy transport sector. It is worth noting that crack spreads in the market remain at a high level.
3. Cushing Hub: A slight bearish factor is also the increase in inventories at the key Cushing settlement hub by 709 thousand barrels, which shows that the physical availability of oil at the WTI futures delivery point has improved slightly.

Inventories continue a deep pullback. We are also observing a further decline in SPR. Source: Bloomberg Finance LP, XTB

The Crack Spread is already reaching recent local highs, which may suggest high demand for fuel or a shortage. Such large divergences are extremely rare. Source: Bloomberg Finance LP, XTB

WTI crude oil is falling today to a new low since the beginning of the war, finding itself just 1.5% above the February close. Source: xStation5